This week, the future of money came to San Francisco as the conference Finovate Spring 2011 unfolded in SOMA. After two days of hearing many excellent pitches from scores of visionary entrepreneurs in the financial tech (fintech) industry, five things became clear:
1. A seismic shift is underway in the way financial products services will be offered to people and the way in which people will use them. The surge of innovation here in the Bay Area in fintech will radically and permanently change norms around transacting, saving, spending and investing.
2. These innovations tend to be better for consumers, and reflect some new values from financially related businesses that are far more populist than we've seen in generations. Like all good entrepreneurs, the folks at Finovate built products and services that fix things that are broken. America knows broken money systems all too well, and we're still trying to clean up the shattered pieces of our badly flawed financial system. Many of the innovations here represent a much better deal for consumers to save, transact, invest and learn.
3. The vast majority of the new business models pitched at Finovate are actually based in reality. How refreshing! The companies presenting here are not weighed down by the drag of the Rumplestiltskin-style fake-o-nomics that inflate bubbles and generate amusing stories about worthless stock options.
4. Large, old-school financial institutions on Wall Street have a lot to lose to the new wave of consumer friendly offerings, and the new norms emerging at places like Finovate.
Wikinvest co-founder Parker Conrad asserted in his pitch that Wikinvest and others might eventually obviate the financial services providers that rely on consumers not paying attention, or having opacity drive revenue in their products. Parker had one of the great quotes of the gathering:
"Sunshine is the best antiseptic."
It is certainly toward the top of my list as a way to improve our financial system.
5. Among 850 people attending, there is only one person here from government -- from the burgeoning Consumer Financial Protection Bureau -- kudos to the CFPB for being here. It's a big problem that none of their cousins among the regulators, SEC, Treasury and myriad other agencies that care about and influence financial systems, joined them here.
If government intends to balance fairness, productivity and opportunity in the marketplace of financial products and services, they need to understand how fintech is changing this marketplace. It's not too late for them to join the conversation. Finovate gathers again in NYC in the fall.
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